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We are proud to present our New Balance Responsible Leadership report. The full report also provides vision for our global sustainability initiatives, as well as social, supply chain and community efforts.

Since 1906, and with our first pair of running shoes in 1938, New Balance has been committed to moving the world physically, emotionally and intellectually. With more than 5,000 associates worldwide, and New Balance product available in more than 120 countries, our global responsible leadership movement is based on our company – and our associates – giving back, moving the environment forward and encouraging people to act as catalysts and coaches.

“With this first attempt to publicly showcase our Responsible Leadership efforts, we share with you our journey that has brought us where we are today. Enjoy this exploration of our history and blueprint for our future. First and foremost, this report was developed for you. Join us in moving the world.”

Jim and Anne Davis

RESPONSIBLE LEADERSHIP REPORT

An exploration of our history. A blueprint for our future. Since its inception, New Balance has worked to give back to the communities in which we operate and create an environment that our associates value. Learn how New Balance is moving people forward today and what you can do to get involved.

Moving the Environment Forward

Environmentally Sustaining Product and Facilities. Treading lightly on limited resources, striving for zero waste in what we do, and what we make, and assessing the lifecycle impacts of
our products and activities.

Moving Forward Together

Investments in People. Creating a safe and healthy work environment that fosters learning and development, advances sustainable business practices, operates with integrity and humanity and contributes to the health and well-being of our consumers and communities.

LETTERS FROM OUR LEADERS

JIM & ANNE DAVIS

CHAIRMAN & VICE CHAIRMAN

With this, our first effort to publicly showcase our Responsible Leadership efforts, we share with you our 106-year journey that has brought us to where we are today.

At New Balance, we are proud of our unique history. Although we have not previously told our story publicly, it is well known within our walls. We use our past to guide our future, while always striving to retain our family values and cherished culture. Like most brands, New Balance has experienced many highs and lows, but it has always been our personal mission to steward the company with the values that have inspired our culture.

You'll see that, throughout our long journey, we chose to adhere to our roots by doing things differently. We maintained "the New Balance way." When others said it couldn't be done, we prevailed with width sizing for better running performance and domestic manufacturing for quick response to customers and commitment to American workers through sustainable employment. As we grew, we found it equally important to thank and support those who made it possible, our communities. Our success allowed us to establish the New Balance Foundation in 1981, and we continue to lead and serve local communities through corporate outreach and foundation grants, associate volunteerism and product donation.

The evolution of New Balance and its family of brands has run a course of steady, sustained growth in a low key, quiet manner. We are proud of the less-traveled road we have taken, finding inspiration in our teammates and being humbled by our accomplishments. Today our associates want to tell the New Balance story. We understand how important this is to our vitality, for team building and for consumer knowledge and decision making. Our story, the New Balance story, encompasses our prevailing values and doing well while moving forward. We are proud of how entrepreneurial our company still feels, even after reaching $2 billion in global sales for 2011. But we are also proud that this foundation of doing well and doing good is part of the unchanging core and future vision of New Balance.

To both our new and longtime associates, enjoy this exploration of our history and blueprint for the future. First and foremost, this report was developed for you. To our partners who help make and sell our products, the communities who host our associates, and all who touch and enjoy our products, we offer you a deeper look at New Balance values in action. To all, we invite you to join us in moving the world.

Sincerely,

Rob DeMartini

PRESIDENT & C.E.O.

Beginning with our founding, New Balance has followed its own path. We don't presume that the usual ways of doing things are best. Instead of making quarterly decisions, we make long-term choices that will sustain our business and keep us on the road to success. In an era of IPOs and mergers to be the biggest, we have not only maintained our 100+ year-old tradition of being private and family owned, but we have achieved global growth and success on our terms. We also maintain a deep-seeded relationship with our communities and have a history of volunteerism and philanthropy with the areas that proudly support us.

The innovation of our teams and products, in combination with our values, behaviors and foundation of responsible leadership is the reason we've grown, even through difficult economic times. We know associates are our greatest asset and they are driven to achieve. We are fully committed to development and growth in our offices, factories and retail locations.

Doing things our way is the only way we know and continuing to support U.S. domestic manufacturing is just one important example of our alternative path. While we could have chosen to abandon U.S. manufacturing and move all production overseas we have made a commitment to local manufacturing and our factory associates because we see the long-term impact on a daily basis. The people crafting shoes in our own factories have an average tenure of 8.4 years, twice the 2010 U.S. factory average. We even have some third-generation associates in our factories. We're proud of our team's commitment to lean manufacturing and continuous improvement. Their work allows us to leverage our proximity to the U.S. retailer and U.S. consumer to provide faster replenishment and delivery.

Many have asked recently, how do we improve the viability of U.S. manufacturing? Our strategy has always been to make long-term investments. For example, in the U.S., we invest in training our associates and improving our facilities. We invest millions of dollars in local suppliers and the community. We support the jobs of our 1,300 workers in our factories and we also positively impact 38 domestic suppliers and their more than 5,000 employees. It is not easy, but we make it a corporate priority because we ultimately benefit from increased innovation, cascading learnings across our facilities and by being the only major company who can provide our retailers and consumers with athletic footwear made in USA and Flimby, UK.

Going forward, we have much work to do. Although many of our Responsible Leadership efforts are at the forefront of our industry, there are other areas, where our peers lead the way and we can learn from them. In the past, we tended to tackle industry challenges alone. We are now participating in progressive industry collaborations, and in every case, we are there to learn from committed members and to share what we do well. We have not communicated to all our important stakeholders, and this report is an important milestone to improve that dialogue. Finally, we are aggressively working on our Responsible Leadership metrics and systems. We look forward to sharing more with you on that in future updates.

Business is a powerful force for social change and a reason to thank those who help us succeed. As we all move forward, it is the role of Responsible Leadership to lead the way.